Please, show your work on the following questions. Do not use Excel. Handwritten answers.
Thank you
1: a: 11%
Using financial calculator
Input: FV= 1000,PMt=9%*1000/2=45
N=22*2=44
PV=-835.42
Solve for I/Y as 5.5
Cost of debt before tax = 5.5%*2 = 11%
2: a: 6.6%
After tax cost = 11%*(1-40%) =6.6%
Please, show your work on the following questions. Do not use Excel. Handwritten answers. Thank you...
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Please solve the following problem using Financial Formulas Only. Please No Excel. Roberto Inc. is a manufacturing company. The company has always followed their ideal capital structure which the management insists is 40% debt and 60% equity capital. The company can issue bonds for 9% coupon rate with 22 years to maturity. The interest is paid semi-annually. The bonds can be issued with a price of $835.42 today. Roberto's marginal tax rate is 40%. For cost of equity, the company...
Please solve the following problem using Financial Formulas Only. Please No Excel. Roberto Inc. is a manufacturing company. The company has always followed their ideal capital structure which the management insists is 40% debt and 60% equity capital. The company can issue bonds for 9% coupon rate with 22 years to maturity. The interest is paid semi-annually. The bonds can be issued with a price of $835.42 today. Roberto's marginal tax rate is 40%. For cost of equity, the company...
Please solve the following problem using Financial Formulas Only. Please No Excel. Roberto Inc. is a manufacturing company. The company has always followed their ideal capital structure which the management insists is 40% debt and 60% equity capital. The company can issue bonds for 9% coupon rate with 22 years to maturity. The interest is paid semi-annually. The bonds can be issued with a price of $835.42 today. Roberto's marginal tax rate is 40%. For cost of equity, the company...